ROVworld Subsea Information

'Oil Jobs Will Be Hit Hard By Tax Smash-and-Grab'
Date: Tuesday, December 20, 2005 @ 05:30:04 EST

The Aberdeen Press and JournalSNP leader Alex Salmond today argued there is a "domino effect" of oil giants slashing investment after the Chancellor's tax hike.

And he warned thousands of North-east jobs were now at risk.

BP is the latest firm to announce a review of its North Sea operation in light of Gordon Brown imposing an extra 10% tax on oil and gas producers.

On Friday it emerged Shell had cut back a UK North Sea drilling contract from three to two rigs after the tax increase.

Today Mr Salmond, the Banff and Buchan MP, said: "There's a domino effect taking place among industry leaders like Shell and BP, which is likely to spread through the industry.

"The big impact will not be felt by the international oil majors, who can switch to other oil provinces, but by small companies and workers who depend on the North Sea.

"It looks like Brown's smash-and-grab will cost thousands of Scottish jobs."

Alex Johnstone, North-east MSP and Scottish Conservative energy spokesman, said Mr Brown had "no interest in the Scottish economy".

BP, with 3,000 people in its North Sea business, said it would start to feel the tax hike from 2007.

A spokeswoman said: "We, along with the rest of the industry, are reviewing our investment portfolio in light of the tax changes.

"This tax increase will make it harder for future UK opportunities to compete for global investment - and clearly, there will be less available to invest."

BP has spent more than £1 billion on its UK offshore business in 2005 and its 2006 contracts are already in place.

The spokeswoman said a move into a new HQ in Aberdeen would not be affected by the review.

All 950 staff and about 200 contract workers will move to the Stoneywood Road site by the end of 2007.

Sir Ian Wood, chairman and chief executive of energy-services company Wood Group, also criticised Mr Brown's decision.

He said: "The chancellor decided to go ahead with a pretty significant increase without discussion with the industry."

Source: The Press & Journal

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